In 1975, the US Congress enacted corporate average fuel economy (CAFE) standards for domestically made automobiles with the hope of reducing the country's dependence on imported oil. It didn't work. Now Congress is considering legislation that would toughen CAFE standards with the hope of preventing catastrophic warming of Planet Earth. That won't work either.
Something about energy overwhelms people with the need to tell others how to live. Submission to this urge was perhaps inevitable in 1975, so soon after the Arab oil embargo of 1973-74. Political pressure was irresistible to respond to fears of oil shortage.
It's now clear that those fears were exaggerated and that panicky responses failed. CAFE standards proved no match for economic growth, consumer preference, and industrial ingenuity. And they clashed with a kindred federal folly extended during the postembargo frenzy-price controls.
Warming fear
In response to fear about global warming, the House of Representatives proposes in its energy bill an oil-saving mandate likely to require a toughening of CAFE mileage limits-now 27.5 mpg for cars and 20.7 mpg for light trucks. The Senate dropped an aggressive CAFE change from its energy proposal. The issue will probably flare up again in the conference committee working to reconcile the bills.
Mandated improvements in vehicle fuel efficiency are supposed to reduce fuel consumption and, in turn, emissions of carbon dioxide, a greenhouse gas. With less CO2 entering the atmosphere, measured surface temperatures won't increase as much as some observers fear that they otherwise might. At least that's how the argument goes.
But the logic is flawed. History provides no reason to believe fuel use will subside meaningfully because of tighter fuel economy standards. Even if it did, the effects on CO2 concentration in the atmosphere would be negligible and on global average temperature even less.
CAFE standards, like price controls, create false incentives. By making cars and trucks more expensive than before to manufacture and buy, they extend the driving lives of old, less-efficient vehicles. By increasing fuel mileage, they encourage owners of new vehicles to drive more than before. And by limiting manufacturers' abilities to meet customer needs with the heavily regulated part of the vehicle fleet, they stimulate production of other, less regulated products. Forced by the original CAFE initiative to shrink large car models, for example, automakers created minivans and sport utility vehicles (SUVs) in the then-unregulated light-truck category to satisfy motorists' demand for heft.
The effects? Last year, average US oil demand was 20% higher than it was in 1975. Gross imports of crude and products were nearly twice as high, their share of demand having climbed during the period to 61% from 37%. Oil demand sagged during the early 1980s, but the reason for that had more to do with general economics, rising prices, and price decontrol than with CAFE standards.
Supporters of CAFE-type remedies might argue that the 2001 demand and import numbers would have been higher if the government hadn't meddled in decision-making about vehicle purchases. That argument stumbles over the surge in popularity of minivans, SUVs, and pickup trucks. It puts too much emphasis on vehicle size and too little on far more important drivers of fuel consumption, such as prices and economic compulsions to drive. And it ignores a question that should be paramount in the US: Why is the government telling free people what kinds of vehicle to buy, especially when safety is a major reason for the size preference?
Futile precaution
As a precaution against global warming, a toughening of CAFE standards would be futile. Even if the measure trimmed fuel consumption, the effect on volumes of CO2 entering the atmosphere would be minuscule. It certainly would not be enough to lower global average temperature, which changes-downward as well as upward-for many reasons other than human emissions of CO2.
CAFE standards are effective at disrupting vehicle manufacture and inspiring creative human beings to maneuver around government excesses. They delight people who mistake energy choices for moral rather than economic propositions. They seem like action but in fact fail to achieve real energy and environmental goals. They also compromise freedom and vehicle safety. A tightening of them shouldn't be part of the final energy bill.
